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Secretary of State Madeleine K. Albright
Intervention at the APEC Ministerial Meeting on the Issues of Iraq and Economic Recovery in Asia
Kuala Lumpur, Malaysia, November 15, 1998
As released by the Office of the Spokesman
U.S. Department of State

Minister Rafidah, Excellencies and colleagues, let me begin by thanking our hosts, the Malaysian people, for their hospitality and for the fine arrangements they have made for this conference.

I am proud to join Secretary of Agriculture Dan Glickman, our chief trade negotiator Ambassador Charlene Barshefsky, and Deputy Secretary of Commerce Robert Mallett, in representing the United States. And I am pleased to welcome our new partners from Russia, Vietnam and Peru.

Before I begin, I would like to say just a few words about Iraq. As ministers know, the Government of Iraq has repeatedly refused to comply with UN Security Council resolutions and UN weapons inspections. They want two, incompatible elements: to keep weapons of mass destruction and to lift sanctions.

Time and again, Iraq has promised to come into compliance and then broken that promise. Yesterday, it made another such promise in a letter sent to Secretary General Annan, but that letter included a demand that the world agree to Iraq's terms about what a comprehensive review of Iraq's obligations would entail. This is a demand that has already been rejected by the Security Council, and is not acceptable.

As a result, President Clinton has chosen to delay his visit to Asia. I have spoken to the President and he has told me how much he would prefer to be here. He has taken a personal interest in the Asian financial crisis and has pushed all around him to be imaginative and to look for a solution and new ideas. Unfortunately, for months and months, we have been in the Iraq crisis mode. The United States has been patient, while Iraq has been provocative. In consequence, we prepared to act. We remain poised to act. It is up to Saddam Hussein to agree to comply with the will of the international community, without conditions and without delay. Otherwise, he and he alone will be responsible for the consequences.

And now, I return to the subject at hand.

Last year, at our meeting in Vancouver, I said that the true test of an institution comes not when skies are sunny and seas calm, but rather in times of high winds and storm.

The intervening months have certainly been a period of turbulence and testing for the Asia Pacific community.

We have been confronted by the most severe challenge to the international financial system in five decades. Through much of the region, growth has slowed or turned negative. Tens of millions of people have had their dreams shaken. Many economies are saddled by high unemployment, not enough capital and too much debt.

As a result, our meetings here this weekend are being watched closely. The world wonders whether we will retreat from the principles of economic and political openness around which APEC was built, or reaffirm those principles and thereby help restore global financial confidence.

America's position is clear. Over the past quarter century, expanded trade and freer markets have brought a remarkable flowering of prosperity, especially in this part of the world.

Our challenge now is to restore the flow of capital to the region's markets. We can't do that by closing those markets, throwing up protectionist walls or trying to turn back the clock. Nor can we simply settle for the status quo. Our policies must be pro-growth, pro-prosperity, pro-democracy and pro-people.

This means we must move ahead with the full package on Early Voluntary Sectoral Liberalization.

We should heed the examples of Thailand and the Republic of Korea, which have responded to the current crisis not by looking for easy answers, but by implementing sound budget and monetary policies and by improving the governance of their financial sectors.

We should renew our commitment to the rule of law, and by that I mean not the misuse of law to stifle change or repress dissent, but democratic laws to curb corruption, ensure accountability, guarantee due process, and protect human rights.

At the same time, we should move ahead on President Clinton's action plan to spur growth, get viable businesses running again, extend trade finance, help people who have been devastated by the crisis, and strengthen the international financial architecture.

I am pleased to say that the United States is doing its share. Our vast markets remain open. To keep our economy growing, the Federal Reserve Board has reduced interest rates twice. Congress has met our obligations to the IMF. We have made $5 billion available to finance trade in the region.

We are providing more than $200 million in food aid to Indonesia.

We are pushing hard to expand social lending by the World Bank and the Asian Development Bank not by a little, but substantially and for a period of years.

And we will do more. We will launch a bilateral aid initiative called "Accelerating Economic Recovery in Asia." A U.S. team will travel to the region soon to consult with you about how we can most effectively address urgent needs.

For example, we need to do more to assist children by enhancing child survival, expanding educational opportunity and helping students to stay in or return to school.

We need to do more to help business, especially small and medium-sized enterprises, to obtain credit and create jobs.

We need to develop better systems for helping people cope with inevitable economic dislocations, so they can take advantage of upswings in the global economy while riding out the downturns.

And we need to harness the expertise of the private sector to provide hands-on advice on how to attract reliable long term investment and incorporate best business practices throughout the region. I have in mind a sort of international private sector peace corps.

To bring all this together, and to share views and experiences on how to move forward, I propose that APEC establish an ad hoc Task Force on the Social Framework for Growth.

The United States knows that this has been a very painful year for many of our friends in Asia. We recognize that there remain many uncertainties and risks. However, we believe that the region has made a good start in righting itself and resuming its course towards prosperity and growth.

President Clinton first brought APEC leaders together five years ago because he believed that the shape of the twenty-first century would be determined, in large measure, by the policy choices we make and the actions we take. That belief has not weakened; nor has our faith in the skills and ingenuity of the people of this region. Nor has America's conviction that, together, we will make the right choices for our economies and for our shared future.